Which of the Following Statements Is Correct

question 17

Multiple Choice

Which of the following statements is correct?

• A) A hostile takeover is a primary method of transferring ownership interest in a corporation.
• B) The corporation is a legal entity created by the state and is a direct extension of the legal status of its owners and managers,that is,the owners and managers are the corporation.
• C) Unlimited liability and limited life are two key advantages of the corporate form over other forms of business organization.
• D) In part due to limited liability and ease of ownership transfer,corporations have less trouble raising money in financial markets than other organizational forms.
• E) Although stockholders of the corporation are insulated by limited legal liability,the legal status of the corporation does not protect the firm's managers in the same way.

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Definitions:

Pure Monopoly

A market structure wherein a single company or entity exclusively supplies a particular product or service, facing no competition.

Allocative Efficiency

A state of resource allocation in which it is impossible to make one individual better off without making at least one individual worse off.

Short Run

A term in economics referring to a time frame in which certain resources, particularly capital, are fixed and cannot be adjusted.

Socially Optimal Price

The price point at which the social welfare (total benefits to society) is maximized, often considered when analyzing the impact of public goods or services.